Singapore company registration specialist Rikvin is optimistic that Fitch’s latest ratings will bode well for Singapore businesses as China’s growth story is intimately connected to Singapore’s and vice versa, the republic’s growth story is part of Asia’s larger growth story. Furthermore, Fitch’s ratings highlight Singapore’s role in contributing to Asia’s growth story.

Rikvin has also determined four pertinent factors that motivate small businesses and established multinational companies to opt for Singapore company incorporation as a launching pad to enter regional developing economies such as Vietnam, Thailand and Malaysia. The four factors are 1) Singapore’s wide network of trade agreements, 2) ease of doing business in Singapore, 3) the Republic’s attractive tax system and 4) strong focus on intellectual property protection.

WIDE NETWORK OF TRADE AGREEMENTS
Singapore and China’s trade relations have been bolstered through the signing of the China-Singapore Free Trade Agreement (CSFTA) in September 2008 and after eight rounds of negotiations. By 2010, 95% of Singapore exports to the largest economy in Asia, estimated to be worth S$18 million, were exempt from tariffs.

However, China is just one of the economies Singapore has synergic partnerships with. Just recently, Singapore bolstered its relations with India, Abu Dhabi, Colombia, Brazil and Norway to deepen partnerships in the areas of clean energy, oil & gas and education.

Additionally, Singapore has signed 20 Free Trade Agreements (FTAs) with 27 economies as well as 69 comprehensive Avoidance of Double Tax Agreements (DTAs) to date. The wide network of trade agreements not only facilitates business across borders but makes it less costly for small businesses in Singapore to expand their operations.

EASE OF DOING BUSINESS
Singapore has been ranked by World Bank as the easiest place to do business for six consecutive years, even surpassing regional rival, Hong Kong, because of factors such as the ease of setting up a Singapore company as well as trading across borders and dealing with construction permits.

ATTRACTIVE TAX SYSTEM
One of the factors that has been listed in World Bank’s 2012 Doing Business Report is paying taxes and Singapore ranked number 4 worldwide. With regards to paying taxes in the Republic, Singapore corporate tax and personal income tax rates are based on a progressive system which shows to be more attractive than some other mature economies. In addition, Facebook co-founder Eduardo Saverin’s recent announcement to stay in Singapore and relinquish his U.S. citizenship has featured Singapore’s attractive tax regime and absence of capital gains tax
as pull factors by some news reports.

STRONG FOCUS ON INTELLECTUAL PROPERTY (IP) PROTECTION
Following this year’s national budget statement, Singapore is incentivizing entrepreneurs to acquire and register Intellectual Property Rights (IPRs) via the Productivity and Innovation Credit (PIC) Scheme. Under the PIC scheme, the owner of a Singapore-registered company will automatically enjoy 400% tax savings or a 60% cash payout should he register or acquire intellectual property such as trademarks and patents.

Adding his comments, Mr. Satish Bakhda, Head of Rikvin’s Operations, said, “Fitch’s positive ratings, together with Singapore’s unique combination of business enablers, are vital indicators of why Singapore attracts entrepreneurs and investors and also contributes to Asia’s growth story. We are optimistic that Fitch’s reaffirmation of Asia’s economic strength will attract more businesses to consider Singapore company formation.”

According to Euromonitor International, the Asia Pacific region accounts for nearly half the world’s US$96.9 billion market for skincare. It grew from US$37.6 billion in 2010 to US$42.3 billion last year. P&G also accounts for 5.8% of Asia’s skincare market, led by its Olay and SK-II brands. Moreover, its babycare unit is already based in Singapore.

The migration of the business unit will take approximately two years and is an attempt by the company to focus on its key consumer bases, following a slowdown in the developed world. As a result, Virginia Drosos, P&G’s Group President of Global Beauty, will retire from the company effective September this year due to family commitments. She will be succeeded by Deb Henretta, who currently is the Group President for Asia.

Analysis by Rikvin shows that P&G has already laid the foundation for the migration of its skin, cosmetics and personal care business five years prior. In December 2007, P&G opened a 6500 square meter lead design perfume plant in Singapore. The facility was designed to drive the company’s global perfume business. Additionally, the company began the construction of its S$120 million Innovation Center last year. The research and development (R&D) center, which is set to lead the beauty care and male grooming markets by 2015, will generate 400 jobs when fully completed.

“This reaffirms our belief that Singapore Company Registration is a good option for the world’s leading consumer businesses. We are optimistic that other major consumer businesses will take a cue from P&G and see Singapore as Asia’s leading consumer business hub. This in turn may inspire more consumer care and other related business to relocate here, bringing with them white- and gold-collar professionals who will complement the local workforce and opt for Singapore employment pass application,” explained Mr. Satish Bakhda, Head of Rikvin’s Operations.

“International giants invest more in R&D and implement stronger marketing efforts backed by well-known brand ambassadors. Consumers are also more inclined towards international brands, as they have stronger brand equity and are associated with quality. Therefore, consumer businesses such as P&G, that invest in R&D or the registration of patents, therefore are in good stead to tap the 400% tax credit offered via the Productivity and Innovation Credit Scheme when they are based in Singapore,” concluded Mr. Bakhda.

Analysis by Rikvin shows that after relocating to Singapore in 2009, Saverin has invested in a Singapore-based company Anideo, which known for its video-streaming application Denso. Other projects include a cosmetics line by Rachel Kum, Singapore’s 2009 entry in the Miss Universe pageant and Perx, a Singapore-based loyalty card mobile application.

“Saverin making Singapore his home benefits the city-state in multiple ways. Firstly, by investing in Singapore startups, Saverin has created employment primarily for Singaporeans. This is in line with the Singapore government’s appeal for companies to create opportunities for the core Singaporean workforce. Secondly, more American entrepreneurs and angel investors may follow his example and consider Singapore as the best place to seed fund high-potential startups. This will increase the economic pie for everyone by creating a positive cyclical effect,” said Mr. Satish Bakhda, Head of Rikvin’s Operations.

Meanwhile, Saverin is one among a growing number of people are renouncing their U.S. citizenship in recent years, primarily for tax reasons. Data from the Inland Revenue Services (IRS) shows that approximately 1,778 people have renounced their U.S. citizenship in 2011 as a means of legally relinquishing stringent tax filing duties. “This trend could sway in the Republic’s favor as it offers a simpler and more attractive Singapore corporate tax and Singapore personal income tax system,” added Mr. Bakhda.

To start with, the amount of income tax paid depends on one’s tax residency in Singapore. An overseas Singaporean need not file Singapore income tax. Also, the maximum personal income tax rate for residents is 20% for a taxable income of S$320,000. Non-residents are taxed at the flat rate of 15% or the residential rates, whichever is higher. Moreover, an e-filing option is available for all taxpayers and there is no hefty exit tax for renouncing citizenship. There is also an option to withdraw all pension from the central provident fund. Additionally, Singapore does not impose a capital gains tax.

“Singapore’s inland revenue department, IRAS, has made it easy for residents and non-residents to comply with their tax filing duties by making it uncomplicated, affordable and quick. The United States could take a cue from Singapore’s system and avoid further brain drain. In the meantime, we are optimistic that our tax structure will compel more people to relocate here via the Singapore employment pass as a way of complementing the local workforce and eventually opt for Singapore permanent residence via the PTS Scheme,” concluded Mr. Bakhda.

On February this year, a bigger player has entered the market. Zalora, which was founded by 3 entrepreneurs all between the age of 29 and 31, has a team that is estimated to be 300-strong now and has attracted more than 5,000 customers within the first three months of its operations.

The start-up that is contending to be Asia’s next Net-a-Porter and Asos is funded by Rocket Internet GmbH, a German company owned by Samwer brothers and famous for helping innovative start-ups in the Internet industry.

The retailer currently offers more than 300 local and foreign fashion brands; and the number is set to cross 1,000 brands by the end of this year in a bid to serve net-savvy clients aged 18 to 45.

Analysis by Singapore Company Registration specialist Rikvin reveals that there are several factors contributing to the popularity of retail start-ups like Zalora. “Firstly, they provide customers with a wide array of choices, from high-end to mass-fashion. Also, operating from a 8,000 sq ft warehouse on Ubi Road means doing away with physical stores or sales staff, ensuring low operating costs. Secondly, the absence of or low delivery costs incentivizes the buyer to click ‘add to cart’ and speeds the gratification process,” said Mr. Satish Bakhda, General Manager and Head of Rikvin’s Operations.

Meanwhile, Zalora is streamlining its logistics services to offer same-day delivery, 30-day free returns, and an option for the customer to pay in cash upon delivery. Additionally, it is aiming to replicate its success in other South East Asian markets such as the Philippines, Indonesia and Malaysia.

“Rising popularity of online shopping, high internet penetration, and lack of big established players regionally may give Zalora the first-movers’ advantage. Furthermore, by being headquartered here, it can also enjoy favorable regional headquarter tax rates which. Zalora’s popularity could also send in other contenders to cut a slice of the regional fashion pie,” added Mr. Bakhda.

According to CBRE’s annual survey of 2012 identifying trends in global retail expansion, 38.9% of 326 retailers have a presence in Singapore, making it the most targeted market in Asia for European retailers. Additionally, Global Language Monitor has listed Singapore as the 8th fashion capital in 2011.

“As the online fashion business expands in the region, we anticipate that local job creation and the increasing demand for warehousing space will follow suit,” concluded Mr. Bakhda.

Singapore Company Registration specialist Rikvin is optimistic that the discussions following the meeting will pave the way for stronger economic ties between the two countries and benefit firms specializing in two focus areas discussed in the meeting i.e. education and science and technology. The discussions, when firmed up, may in turn boost employment for Singaporean as well as foreign professionals in these sectors.

Analysis by Rikvin shows that bilateral relations between India and Singapore has become stronger after both countries signed a Free Trade Agreement (FTA) called the Comprehensive Economic Cooperation Agreement (CECA) in 2005. As a result, trade between India and Singapore registered US$35 billion in 2011.

Singapore has also emerged as one of the largest source of FDI inflow into India, amounting to US$15.67 billion between April 2000 and November 2011. This accounts for 10% of total FDI inflow to India. Conversely, India is Singapore’s eighth largest foreign investor. According to figures from the Reserve Bank of India, the cumulative Indian FDI into Singapore was US$23.42 billion at the end of January 2012.

Singapore is also India’s largest trade and investment partner in ASEAN, and in recent years has become a preferred location for company incorporation for Indian entrepreneurs keen on growing their business in the Asia Pacific region. There are currently approximately 4,000 Indian companies that have opted Singapore company formation, and trade observers claim may reach 6,000 over the next two to three years. According to a recent report by the Singapore Economic Development Board (EDB), Indian companies form the single largest foreign business community in Singapore.

Other than strong bilateral relations, Rikvin has recognized five major factors that play a role in attracting Indian businesses, investors and professional to set up a company in the city-state i.e. 1) attractive Singapore corporate tax and personal income tax rates, 2) the ease of doing and setting up business in Singapore, 3) Singapore’s extensive network of tax treaties (FTAs and DTAs), 4) absence of capital gains tax and 5) lower lending rates offered by banks in Singapore.

Commenting on Singapore’s continued attractiveness for Indian investments and diaspora, Mr. Satish Bakhda, Head of Rikvin Operations, said, “Other factors include Singapore’s pro-business environment, which is backed by sound corporate governance as well as strong cultural affinity due to the presence of a large Indian community here. We anticipate that discussions to bolster the education as well as science and technology sectors will bode well for professionals from both economies. Furthermore, as both India and Singapore pledge to amend the CECA this year, we can look forward to closer business synergies in other sectors as well.”

Singapore Company Registration specialist Rikvin is optimistic that the move, which will come into effect in October 1, 2012, will give not only ordinary, but seasoned investors and high net worth individuals (HNWIs) in Singapore a wider array of complex investment products to invest in. Rikvin is also optimistic that by opening up the playing field to ordinary investors, Singapore will create a freer and more dynamic investment environment which in turn benefits investors and businesses.

EIPs will include 1) EIP-equivalent investment products listed on foreign exchanges, 2) some Collective Investment Schemes (CIS) and 3) sub-funds of Investment-linked Life Insurance Policies (ILPs) with effect of October 1, 2012.

As EIPs are categorized by complexity, rather than risk levels, banks and brokerages will also be required to 1) counsel potential clients of risks related to the product as well as 2) to ensure a client’s approval on the risk warning disclosure prior to their first purchase.

Commenting on the move, Mr. Satish Bakhda, General Manager and Head of Rikvin’s Operations said, “On one level, we welcome the move to expand the EIP offerings to new ordinary investors as this would help create a more robust and heterogeneous trading environment. At the same time, this move signals seasoned investors and HNWIs that trading in Singapore is a little freer and this may enhance the republic’s attractiveness as an investment location. This in turn benefits EIP-related businesses and may sway their decision to form a Singapore company.”

“On another level, we also welcome the new requirement for intermediaries to counsel investors prior to purchase. When investors make decisions that are sound and informed, their likelihood of reaping higher returns are increased. This in turn safeguards their interests as well as the businesses offering the products,” affirmed Mr. Bakhda.

During his visit, Mr. Lim held high-level meetings for increasing mutual economic cooperation with his Brazilian counterpart Fernando Pimentel, senior representatives of prominent Brazilian companies and the Governor of Rio de Janeiro, Sérgio Cabral. Mr. Lim also visited Singapore companies in Brazil, including Keppel FELS Brasil – a wholly-owned subsidiary of Keppel Offshore and Marine.

This visit assumes significance after Prime Minister Lee Hsien Loong’s meeting with Brazilian president Dilma Rousseff on the sidelines of the G-20 summit last year.

Singapore’s relation with Latin America has taken a boost in recent years with signing of free trade agreements (FTAs) and exchange of development experience under the Singapore cooperation programme. One of the main vehicles to promote Singapore-Latin America relations is the forum for the East Asia-Latin America Cooperation, which initiates programmes for bridging social and cultural chasms, and promotes better understanding between the two regions.

Rikvin is confident that this ministerial visit will bode well for Brazilian firms willing to opt for Singapore company formation in the coming years.

“Brazil is one of Singapore’s top trading partners in Latin America, with bilateral trade reaching S$4.16 billion last year – a whopping 11% increase from 2010. The number of Singapore-based companies with interests in Brazil in sectors such as oil and gas, ports and shipping, freight and logistics, commodities, aerospace, consumer electronics and information and communications technology, is growing rapidly,” said Mr. Satish Bakhda, Head of Rikvin’s Operations.

“Similarly, we anticipate that Brazilian companies looking to take advantage of Asia’s growth story will use the city-state as a gateway to the regional market by setting up a Singapore company, thereby strengthening our bilateral trade and investment ties. Moreover, Brazilian industry leaders and entrepreneurs may opt for the singapore work visa to take advantage of our position as a regional economic hub,” Mr. Bakhda added.

Singapore Company Registration specialist Rikvin is positive that the discussions following the 6th Joint Forum will open more doors for Singapore businesses and create more employment opportunities for professionals from both economies to tap.

The forum, which was organized by International Enterprise Singapore (IE Singapore) and Abu Dhabi’s Executive Affairs Authority (EAA), was attended by approximately 100 government and business representatives from both countries.

In gist, both Singapore and Abu Dhabi have agreed to work together on the areas of 1) urban planning, 2) waste and wastewater management, 3) R&D for semiconductors and 4) media development. These areas of interest are in line with Abu Dhabi’s Economic Vision 2030.

URBAN PLANNING
In the area of urban planning, Abu Dhabi’s Urban Planning Council (UPC) and Singapore’s Urban Redevelopment Authority (URA) have signed a 3-year Memorandum of Understanding Singapore to pave the way for 1) information exchanges relating to sector developments in respective economies and 2) the development of human capital between UPC and URA.

Rikvin is optimistic that the UPC-URA MoU will create more employment and professional exchange opportunities between both countries as RFPs may be granted to private sector vendors. This in turn may create a higher demand for the Singapore employment pass in the urban planning sector.

WASTE AND WASTEWATER MANAGEMENT
On the back of the Singapore International Water Week (SIWW), both Singapore and Abu Dhabi will continue to 1) exchange information and thought leadership in water sustainability and reclamation as well as 2) to work on a possible event, similar to SIWW, with Abu Dhabi next year.

SEMICONDUCTOR R&D
Both Singapore and Abu Dhabi discussed furthering their partnership in semiconductor research and development (R&D). Prior to this forum, Singapore has hosted 25 engineering students from Abu Dhabi under a training program. On the back of this partnership, Rikvin anticipates that Advanced Technology Investment Company (ATIC) will soon opt for Singapore company formation.

Commenting on the Forum, Mr. Satish Bakhda, Head of Rikvin’s Operations said, “The areas of discussion underscore the maturity of Singapore’s economic and cultural partnership with UAE. Both economies have come a long way since the signing of the UAE-Singapore DTA and GCC-Singapore FTA. Between 2007 and 2011, trade between UAE and Singapore has grown at a fast clip (13.8%) and visitorship from Abu Dhabi has increased by 9% in 2011. We anticipate that the recent discussions will pave the way for more win-win situations for both economies.”

The grant, worth S$250,000 or 100% of the project’s production budget (whichever is lower), is open to any production firm that 1) has opted for Singapore company incorporation and 2) is listed in the Media Singapore Standard Industrial Classification (SSIC) Code.

However, SFC will consider applications that fulfil the following requirements:

• delivers a film that is over 70 minutes in 35mm, DCP, HDCam and other digital formats.
• is directed by a Singaporean or Singapore permanent resident (PR) filmmaker who is also an officer bearer of the business entity.

Under the scheme, directors have the liberty to execute feature film projects across a variety of genres, languages and platforms including cinema, film festivals and broadcast television. However, 40% of the grant must be Singapore spend.

Analysis by Rikvin shows that this scheme reaffirms MDA’s pledge last year to boost the Republic’s feature film industry as announced last year and developing Singapore into a major feature film industry hub.

“It will give a boost to enterprise development in local media companies by propelling them to the next league,” said Mr. Satish Bakhda, Head of Rikvin’s Operations.

This spells good news for foreign media enterprises looking to setup a Singapore company.

Andrius Dementavicius, Founder and Managing Director of SOSnaked, an exclusive producer boutique added,” Singapore is an interesting place for filmmaking at the moment as MDA is putting its weight behind promoting the industry. Some new studios are cropping up and there is a growing market for production firms that offer a wider variety of locations, different from what we have in Europe.”

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To find out how you can earn tax savings through IP registration and acquisition, please visit our Guide on the PIC Scheme.

In gist, the MoU aims to promote Colombia as an emerging market to Singapore companies. To that end, both economies have agreed to 1) exchange information on growth opportunities regularly and 2) organize trade events to promote better understanding of their respective market and sectors needs.

Singapore Company Registration specialist Rikvin is optimistic that the MoU will benefit Singapore firms and may boost employment for Singaporeans as well as foreign professionals. This is because the MoU will pave the way for increased trade and investment between the two economies.

This year, World Bank has named Colombia as the third best place to do business in Latin America; partly due to its strong investor protection (6th in the world). Colombia has also demonstrated a strong track record of multiplying its FDIs by tenfold since 2003. According to Business Monitor International’s Q2 forecast report, the country is expected to grow over 4.4% annually over the next 10 years.

In 2011, trade between Singapore and Colombia grew by 128.4% to S$755.9 million. During the same year, Colombia’s GDP grew by 6%, making it the the fourth largest economy in Latin America then.

Analysis by Rikvin shows that the Singapore-Colombia MoU will open up doors for Singapore incorporated companies to pursue projects and RFPs in sectors such as 1) oil & gas, 2) e-Government services, 3) agri-commodities, 4) consumer goods, 5) aerospace maintenance and 6) infrastructure development.

In the same swoop, Singapore and Colombia has also signed an Air Services Agreement (ASA) to facilitate travel and trade between both economies.

Mr. Satish Bakhda, General Manager and Head of Rikvin’s Operations said, “Rikvin recognizes the signing of the MoU on Singapore’s part as an effort to increase investment flows and trade from Colombian firms and investors. At the same time, the MoU gives Singapore firms another emerging market to explore aside from BRIC and developing regional economies.”

“We anticipate that the synergies could in turn boost employment and the demand for both Singaporean as well as foreign specialists or subject-matter experts in the related fields. In turn, we could see more Singapore employment pass applications from Colombia as well as the growth sectors open to Singapore firms. We could also see more Colombian firms opting for Singapore company setup. In years to come, this partnership could develop into the formation of a Free Trade Agreement (FTA),” added Mr. Bakhda.